The US holiday marked a slow start to the week, which could be modified by key data such as non-farm payrolls.
He global dollar fell on Monday but remained within striking distance of its highest level in nearly two weeks as investors’ attention shifted to a report from employment of USA which will be published later this week.
US payrolls, due on Friday, will be crucial after the president of the Federal Reserve (Fed), Jerome Powellwill move from a battle against inflation to a measure to protect against job losses.
Analysts say employment figures will determine the magnitude of any rate cuts the Fed plans, while markets have been pricing in a 25 basis point cut for weeks.
He dollar index The U.S. dollar weakened 0.08% against six major pairs to 101.67, after touching 101.79, a level not seen since Aug. 20. It fell to 100.51 last week for the first time since July 2023 after Powell sent a strong message about starting rate cuts.
He euro advanced 0.2% to $1.1060, after touching $1.1043, its lowest level since Aug. 19. On the European political front, projections showed that Alternative for Germany (AfD) was on track to become the first far-right party to win a regional election in Germany from the Second World Warwhich gave him unprecedented power, even though other parties would surely exclude him from power.
Some investors fear that a political stalemate in Germany and France prevent that Europe move forward with integration initiatives that could boost growth and enable the European Union (EU) play a greater role in world affairs.
Meanwhile, the holiday in the United States this Monday makes the dollar have a potentially slow start to the week, analysts said, but there will be a steady stream of macroeconomic data in the days ahead culminating in nonfarm payrolls on Friday.
Economists polled by Reuters expect 165,000 U.S. jobs to be created in August, up from an increase of 114,000 in the previous month. If the projection is met, the data would be consistent with a “soft landing” and a relaxation of policy by the Fed by 25 basis points this month.
Source: Ambito
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